Denise Roberts, Tax Director, MHA Broomfield Alexander
Did the Life Sciences sector emerge as a winner in the summer Budget on 8 July?
George Osborne’s overall aim was to tackle the deficit by reducing spending and boosting growth via fuller employment creating a further 2 million jobs.
According to the Welsh Government , there are over 350 companies in the Life Sciences sector in Wales employing over 11,000 people, and welcome news for the sector came when the Chancellor announced a lowering of the corporation tax rate from 20% to 18% by 2020 – a significant reduction compared to 28% in 2010.
There was further encouragement in terms of allowances for capital expenditure, which can be significant in many Life Sciences companies. The annual investment allowance (AIA) for eligible capital expenditure is currently £500,000 but was due to fall to only £25,000 from January 2016. The Chancellor announced there will now be a permanent AIA of £200,000 per annum. This will be very helpful to many small/medium sized companies in the sector.